Occupational Hazard Insurance vs Workers Compensation

Occupational hazard insurance is a broader policy that includes various types of insurance related to occupational risks. It is predominantly for independent contractors and employees who are not covered under the traditional compensation policy for workmen. Occupational hazard insurance is also more flexible than worker’s compensation, with specific limitations and conditions.

This policy was introduced to provide coverage for high-risk occupations, as it is challenging to obtain life insurance for such occupations. That is why insurance providers provide this as a combination of life cover and occupation hazard cover.

Workmen's compensation insurance is a government-mandated policy that provides essential coverage to employees who suffered work-related injuries and illnesses. It is a no-fault system that provides compensation regardless of who is at fault for the injuries or illnesses resulting from workplace hazards.

That is why this policy benefits every employee by providing protection and financial assistance during difficult hours. Moreover, it provides them with peace of mind while they work in an organisation and give their best.

Also Read: Key Features of Workmen Compensation Policy Explained

Also Read: Worker’s Compensation (WC) Vs. Employee State Insurance

Medical Expenses

Occupational hazard insurance primarily covers medical expenses incurred due to hazardous incidents. It covers emergency medical treatment, surgical procedures, follow-up care, hospital stays, rehabilitation procedure costs and prescribed medicines. However, it should be noted that independent contractors who opted for the policy have to pay copayments or deductibles.

Also Read: Medical Reimbursement for Employees: Benefits and Best Practices

Accidental Death and Dismemberment

Similar to the workmen's compensation policy, occupational hazard insurance provides death benefits to the independent family members of the deceased employee. It also includes compensation for employees who lose limb(s) or bodily function. But remember that the compensation amount varies depending on the injury, loss and policy limits.

Disability Benefits

Coverage is also provided for employees who are disabled due to any hazardous incident during employment. This policy helps replace employees’ lost income due to disability, but it is quite different from the workers' compensation policy.

Occupational hazard insurance provides coverage and payments for long-term and short-term disability. However, there is a long waiting period to get the coverage amount, and even then, it is capped at certain amounts.

Also Read: How Does Workmen Compensation Injury Settlement Work?

Medical Expenses

A workmen’s compensation policy covers medical services such as doctor’s appointments, hospitalisations, emergency room visits, specialist consultations, and physical and rehabilitation therapy services. It helps employees return to their routines and workforce.

Vocational Rehabilitation

Employee injuries sometimes leave them with permanent or partial disability. In such cases, the workmen's compensation policy is quite beneficial, providing them with necessary vocational rehabilitation. It includes expense coverage for searching for new career paths, job assistance, enrolling in job retention programs, career counselling and resume and interview preparation. This way, employees can find new ways to earn their livelihood and support themselves and their families financially.

Lost Wages Compensation

Worker’s compensation insurance also provides compensation benefits to employees for their lost wages during their injury. Compensation is provided based on the type of injury. Temporary total disability compensation is for those who cannot return to the workforce; temporary partial disability is for those who have reduced work hours or light duty.

Similarly, permanent partial disability compensation is for lasting disabilities and permanent total disability is for long-term who are unable to work.

Death Benefits

Workmen's compensation insurance also covers an employee’s demise due to work-related injuries or illness. In such cases, the compensation provided helps the employee’s family cover funeral expenses and pending medical bills, provides financial support to living dependents and provides educational assistance for dependent children of employees.

Occupational hazard insurance and worker’s compensation insurance are both created to protect and improve the welfare of employees working in various sectors. Employers are entirely responsible for choosing between the two. The information provided here can help employers better understand occupational hazards and workers' compensation. Then, they can decide which SME insurance policy to purchase for their organisation.

However, before buying any policy, make sure to check the insurer’s reviews and their policy features. You can compare workmen's compensation policy online and select a trusted policy provider. For example, TATA AIG workmen's compensation insurance policies provide financial support to employees and help foster a safer work environment for employees.

Is a WC policy mandatory in India?

Yes, the workmen's compensation policy is a mandatory policy that every employer must provide to their employees, as per the Workmen Compensation Act of 1923..

What is a risk in insurance?

Risk in insurance is simply the probability that an event will result in a loss. Insurance companies use risk to determine insurance premium rates and whether or not to pay a claim.

What are the four types of occupational hazards?

The four categories of occupational health hazards are chemical, biological, ergonomic, and physical.

What is a worker's compensation insurance example?

An example of a worker’s compensation policy is: suppose a delivery person working for a courier company injures his leg while unloading a delivery. The injured leg causes him to limp and causes him back pain due to limp walking. The worker’s insurance will provide coverage for the treatment of back pain caused by leg injury.